Gold prices retreated on Friday and were on track for their biggest weekly decline in five months, as the market digested Donald Trump’s victory and its potential impact on the US interest rate trajectory.
Spot gold fell 0.7% to $2,687.48 an ounce at 1224 GMT and was down 1.7% for the week. US gold futures fell 0.4% to $2,694.60.
As widely expected, the Federal Reserve cut interest rates by 25 basis points on Thursday, but signaled a cautious stance on further cuts.
Fed Chairman Jerome Powell said Tuesday’s presidential election results will have no “near-term” impact on U.S. monetary policy. Traders see a 71% chance of a 25-bps cut in December.
Trump’s tariff policy is seen as inflationary, which could potentially slow rate cuts. Uncertainty around the rate-cut trajectory is causing gold to decline, said Soni Kumari, commodity strategist at ANZ.
Bullion is considered a hedge against inflation but high interest rates reduce the appeal of non-yielding bullion.
On the physical front, gold demand faltered in India this week as price fluctuations led buyers to delay purchases following strong festive sales, while some buying was seen in Japan and Singapore.
